The European Commission said an in-depth probe showed that
customers would continue to have sufficient suppliers for
magazine paper and other products, it said in an e-mailed
statement today.

“I’m satisfied that there will remain sufficient
competition after the acquisition,” said EU Competition
Commissioner Joaquin Almunia.

Helsinki-based UPM is aiming to expand as a “cost-competitive pulp producer,” it said last month. Papermakers are
under pressure to combine as costs rise for pulp, wood and
recycled paper and demand for paper slows with more consumers
turning to digital versions of books, magazines and newspapers.

EU approval means “UPM has obtained all required
regulatory clearances for the transaction” and may close the
deal by early August, the company said in a statement today.

The Finnish papermaker said earlier it expects its purchase
of Finland’s Myllykoski and Germany’s Rhein Papier to generate
annual cost savings of more than 100 million euros ($141
million) from 2012. Myllykoski and Rhein, controlled by the same
shareholders, have seven publication-paper mills in Germany,
Finland and the U.S.

UPM rose as much as 5.4 percent to 12.35 euros. They traded
up 3.4 percent at 12.12 euros at 1:53 p.m. in Helsinki.